Why Bitcoin’s Environmental Problems Are So Hard to Solve


Yes. Some use excess natural gas that would otherwise be “flared,” or burned just to get rid of it, to generate electricity for mining.

Others have installed solar panels above their server rooms or struck deals to source low-carbon nuclear power.

Many have settled in places like upstate New York, Canada, Iceland and Norway, where there is an abundance of emission-free hydroelectric or wind power.

This is driven as much by self-interest as it is by concern for the climate – renewable energy tends to be cheaper than other sources anyway.


It’s hard to say.

China’s ban in June 2021 deprived Bitcoin miners of the country’s clean and plentiful hydroelectricity and sent them in search of any inexpensive and reliable power they could find.

Some settle near renewable sources in the United States. Others have appeared in places like Kazakhstan, where fossil fuels still dominate the energy mix.

The impact of all this on Bitcoin’s carbon emissions is unclear because no one knows precisely where all the miners are and what kind of energy they use.

However, a study published by the research journal Joule in February suggested that Bitcoin’s environmental impact has worsened since China’s decision, with the share of renewable energy used to power the grid dropping from more than 40% in 2020 to around 25% in August 2021. .

And don’t overlook the environmental impact of the growing mountain of old computing equipment being scrapped by miners as they try to maintain an edge in processing power.


In parts of the world that have surpluses of renewable energy, Bitcoin miners are still welcome.

Texas, for example, is trying to attract more to act as a demand-response source to match the state’s variable wind generation. In other places they are seen as a threat.

The Chinese ban was a response to an energy deficit that forced it to ration electricity supplies and cut industrial production.

Kazakhstan, a major Bitcoin producer, has imposed limits on the industry after facing its own energy shortages.

Sweden’s financial regulator has called for a Europe-wide ban on cryptocurrency mining, saying it “threatens the climate transition that urgently needs to happen.”

Some governments would prefer to channel renewable energy into older industries that are trying to decarbonise, such as transport and manufacturing.

Other big power users complain that Bitcoin miners suck up scarce energy resources with little return to the host country in jobs and tax revenue.

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